Visa to close memecoin rewards loophole after The Block report

Credit card rewards programs are built on a simple premise: spend in the right category, earn points or cash back. For a brief window, memecoin buyers discovered they could game that system, earning rewards on crypto purchases that Visa explicitly prohibits. That window is closing.

Visa is directing payment processors to stop classifying memecoin transactions under merchant category code 5815, a code reserved for digital goods and media, following a report by The Block published September 1, 2026. The grace period for compliance runs out next week, after which any memecoin purchase through the affected channels must be coded under crypto-specific transaction rules that come with Visa’s standard restrictions on rewards.

How the loophole worked

The mechanism was straightforward. Crossmint, a platform that facilitates secondary sales of memecoins classified as collectibles rather than securities, integrated with both Robinhood Wallet and an app called Fomo. When users bought memecoins through these apps using a Visa credit card, the transaction hit the payment network labeled as a digital goods purchase under MCC 5815.

That single four-digit code made all the difference. Crypto purchases are typically excluded from rewards programs under Visa’s policies, but digital goods are not. So the system, seeing a routine media or software purchase, handed out points and cash back as designed.

The setup also came with notably permissive terms. Users could spend up to $1,000 per day on memecoin purchases without undergoing any Know Your Customer verification. Total volume was capped at $1 million.

Chase was the first to flag the issue, raising concerns with Visa after noticing the coding anomaly. Visa confirmed that at least one transaction had been incorrectly categorized, then began working with processors, including Checkout.com, to mandate the reclassification. As of September 19, 2026, the directive stands: memecoins get crypto codes, not media codes.

Why the classification mattered so much

Merchant category codes are the invisible plumbing of consumer finance. Every card transaction runs through one, and those four digits determine everything from the interchange fee a merchant pays to whether a cardholder earns bonus points. Banks build entire rewards architectures around them, which is why misclassification, intentional or accidental, creates real financial exposure.

Crossmint’s framing of memecoins as collectibles, rather than traditional crypto assets or securities, is the detail that made MCC 5815 seem plausible in the first place. Collectibles have historically occupied an ambiguous space in payment processing, sitting somewhere between physical goods and financial instruments. That ambiguity gave the digital goods code a surface-level logic, even if Visa’s underlying policies never intended it to cover speculative token purchases.

The Block’s report forced the question into the open. Once the misclassification was documented and Chase had already escalated internally, Visa had little choice but to act. Allowing the arrangement to continue would have set a precedent for structuring crypto purchases through adjacent categories, essentially defeating the purpose of having crypto-specific transaction rules at all.

What changes for buyers and platforms

For casual memecoin buyers who were treating rewards as a small bonus on speculative trades, the practical impact is limited but real. The points and cash back stop. The transactions continue, just under a different code with different terms attached.

For Crossmint and the platforms it powers, the change is more significant at the operational level. Both Robinhood Wallet and Fomo still have the memecoin purchase functionality live as of this reporting, but the underlying payment rails are being reclassified on a deadline.

The KYC question is worth watching separately. The previous arrangement allowed $1,000 daily purchases without identity verification. As crypto transaction rules apply, the compliance requirements around those purchases could become more stringent, potentially introducing friction for new users who came to the platform partly because of its low-barrier entry.